20 August 2024, EUR/USD
EURUSD:
EUR/USD rose on Monday as investors started the new trading week by buying euros in the broad market. The price has consolidated at 1.1080 and and is aiming for 1.1100. Recently, poor data from the US has renewed investor fears of an impending recession in the US.
The middle of the week is quiet as markets await key PMI data from the EU and the US as well as the start of this year's Jackson Hole Economic Symposium. All three of these events are expected to hit the markets on Thursday.
The EU purchasing managers' index (PMI) is expected to rise in August. The EU manufacturing PMI for the month is expected to rise to 46.0 from 45.8, while the services PMI for the same period is expected to remain at 51.9.
On the other side of the Atlantic, US PMI data is expected to soften on Thursday. The US manufacturing PMI for August is expected to fall slightly to 49.5 from 49.6, while the services PMI is expected to fall a full point to 54.0 from 55.0.
At the Jackson Hole Economic Symposium, which kicks off a multi-day central bank extravaganza on Thursday, investors around the world will be watching for any signals from Fed policymakers on the likelihood of a Fed rate cut in September.
The latest bets for a double rate cut in September have fallen significantly since peaking at 70% two weeks ago. According to CME's FedWatch tool, the betting markets rate the probability of a 50 bps rate cut. Sept. 18 as one in five. Overall, markets are still fully factoring in the likelihood of a 25 bps rate cut in September, with three or four quarter-point rate cuts expected before the end of the year.
Trading recommendation: Trade predominantly with Buy orders from the current price level
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